Traders Pare Fed Rate Cut Bets for June, But Silver Price Rises

Silver prices surged 1.25% to 81875, overcoming rising U.S. Treasury yields fueled by positive Nonfarm Payrolls (NFP) statistics and undermining hopes of a Federal Reserve rate decrease in June. The total amount of silver ETF holdings this year has increased by 3% as a result of the significant inflows that investors have made into ETFs in the last two weeks.

The outlook for industrial demand for silver was further reinforced by positive manufacturing data from China, a major user of the metal, and projections of rising solar installations. The increase in silver was limited by geopolitical tensions in the Middle East and a decline in the likelihood of a June Fed rate decrease after the positive U.S. jobs data.

Trader expectations for monetary policy clarity are based on U.S. inflation data and FOMC minutes. The largest silver consumer, India, showed strong demand for silver in February as its imports of the metal reached record highs, rising by 260% as a result of reduced levies and increasing purchases from the UAE. In just two months, India’s demand for silver has increased to the level of 2023’s total imports.

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